The Italians seem to be rediscovering the New World — and it’sin the Gulf of Mexico this time. In the largest venture of its kindin the Gulf of Mexico’s deep offshore, ExxonMobil Corp. has givenAgip Petroleum Exploration Co. the opportunity to earn 25% of theU.S. company’s interest in up to 259 deep-water blocks. To earnthe interest, Agip, a subsidiary of Eni, the Italian oil andnatural gas company, has to participate in the drilling of at least12 exploration wells over the next five years.

The agreement covers 1.3 million net acres and is the largest ofits kind to date to be announced in the Gulf of Mexico’s deepoffshore, according to Luciano Sgubini, chief operating officer ofAgip.

“The deepwater operating environment is challenging, but has thepotential to contain large undiscovered accumulations of oil andgas,” said John Cousins, executive vice president of ExxonMobilExploration Co. “The combined capabilities of ExxonMobil and Agipwill result in a very strong partnership to explore thissignificant potential.”

The leases are located on the Outer Continental Shelf offshoreTexas, Louisiana and Mississippi. They extend from Alaminos Canyonto Atwater Valley in water depths ranging from 3,000 to 8,000 feet.ExxonMobil owns 100% interest in about two-thirds of the blocks,and 50% interest in the remainder. Drilling is expected to beginlater this year with ExxonMobil as operator.

While the Italian oil and gas giant holds interests around theworld, the newest venture by Agip is not its first in the Gulf ofMexico. Partnered with Shell, BP Amoco and Conoco, Agip isparticipating on production from Shell’s Europa field in the Gulf.Production is flowing from three wells on Mississippi Canyon Block934 at 40,000 b/d of oil, and 30 MMcf/d of gas. Production from thefirst well there began Jan. 31, and the third and final well of theinitial phase was completed March 11. The Europa subsea productionsystem is about 140 miles southeast of New Orleans in 3,900 feet ofwater, and ties back 18 miles to Shell’s Mars tension leg platformon Mississippi Canyon Block 807.

The Mississippi Canyon Block also includes the Macaroni project,which began in August 1999, and Angus, which began in September1999. Shell is operator of 13 of the projects, and Agip is aparticipating partner in all of them. Agip also partnered withChevron and Shell to begin drilling in July on the initial well onChevron’s “Hurricane” prospect in 2,000 feet of water at Ewing BankBlock 1010 in the Gulf.

And earlier, in January 1999, Agip grabbed a 30% interest, andagreed to participate in EEX Corp.’s George prospect on Blocks 441,442 and 485 in the Mississippi Canyon area of the Gulf of Mexico.EEX is the operator, and retained a 70% interest.

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